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Our Bureau

Mumbai March 14 Videsh Sanchar Nigam Ltd is set to hive off its broadband and retail Internet business unit into a separate subsidiary, DIL Internet Ltd.

The board of the company on Wednesday approved the hive-off, which would be for a consideration of up to Rs 400 crore. The demerger would be subject to approvals.

The decision was based on the recommendation of the Empowered Sub-Committee of the Board, said a statement from the company to the stock exchanges.

The retail business unit, including broadband and retail Internet services, would be hived off with all related assets and liabilities on a going concern basis by way of a scheme of arrangement. The proposed hive-off would be effective March 2007.

VSNL's broadband Internet services have not quite taken off, said an analyst. And its retail internet service consists largely of dial-up ISP connectivity, a business that has remained stagnant, he said. Analysts said they would not be surprised to see the retail business unit's activities eventually integrated with Tata Teleservices' operations.

The scrip ended 2.87 per cent lower to close at Rs 365.50 on BSE today.

More Stories on : Telecommunications | Restructuring | Videsh Sanchar Nigam Ltd | Broadband

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